moved:
Motion No. 2
That Bill C-28 be amended by deleting clause 241.
Madam Speaker, I am pleased to participate in the debate at report stage on Bill C-28.
There are a number of things wrong with Bill C-28. We could mention the government's measures feigning sensitivity with respect to social programs and the deterioration of health care that it has itself brought about through three years of cuts in transfer payments to the provinces in the health, social services and education sectors.
I listened this morning as a journalist put a question to the Leader of the Government in the House of Commons. What the journalist asked him was this: “Has the Government heard the public's cry of distress about health care?” The Leader of the Government in the House replied as follows: “Of course it has. In Bill C-28 you will see that we have added $6 billion for health care and social services. If opposition members vote against Bill C-28, it is because they have not heard what the public is saying”.
If that is not the ultimate in demagoguery, I do not know what is. Because what Bill C-28 says about the $6 billion transfer is that, instead of cutting $48 billion between now and 2003, the federal government is going to cut $42 billion. We will never give our support to a bill that would fly in the very face of what people want, which is an end to cuts in social programs and health care.
There is also a serious problem with an apparent conflict of interest involving the bill's sponsor, the Minister of Finance.
Clause 241 of Bill C-28 provides new tax benefits to international shipping corporations, particularly international shipping holdings. Clause 241 amends section 250 of the Income Tax Act to exclusively protect international shipping holdings against any Revenue Canada claims on taxes applying to profits or other revenues.
There is a moral issue relating to this legislation, but there is also another problem: the bill, including clause 241, was introduced by the Minister of Finance, who owns a holding corporation called Canada Steamship Lines.
The Minister of Finance sponsored a bill that provides him with tax benefits, given his involvement in international shipping.
There is at least an apparent conflict of interest in this legislation, and this is contrary to the Prime Minister's code of ethics adopted in June 1994, soon after he took office. Indeed, this code of ethics refers not only to actual or potential conflicts of interest, but also to apparent conflicts of interest.
There is obviously an apparent conflict of interest, given that the Minister of Finance tabled and sponsored a bill with provisions that favour the finance minister's international shipping activities.
When the Bloc Quebecois put the finger on the problem with Bill C-28, after reviewing the 464 pages of this omnibus legislation, which includes only two paragraphs on international shipping, the Minister of Finance left the House with a historic statement. He was speechless. He began to stutter like people who are caught in the act, like people who have something on their conscience and who just got caught with their hand in the cookie jar.
The second reaction came from the Prime Minister during oral question period. We had barely finished putting our question when the Prime Minister jumped out of his seat to come to the defence of his finance minister, saying he had done nothing wrong and that this new provision would not in any way benefit Canada Steamship Lines, which the finance minister has owned in full since 1988.
The next day, the Deputy Prime Minister joined the Prime Minister in saying that this measure did not apply to Canada Steamship Lines. That same day, reference was made during Oral Question Period to the Department of Finance press release which also stated that Canada Steamship Lines would not benefit from these measures.
The third reaction, as time went on, was less decisive and less definite. It came from corporate taxation division senior advisor Len Farber, the very person to whom we were referred by the Minister of Finance and who is supposedly his right-hand man in terms of policies and political strategies—likely more political than anything else.
Mr. Farber appeared before the Standing Committee on Finance and was asked a series of questions which led him gradually into an area where he felt cornered. He was forced to admit that “Yes, these provisions could be available to that company”, because reference was being made at that time to companies like Canada Steamship Lines, the company of the Minister of Finance.
When the government found itself backed into a corner on the fact that clause 241 could apply to Canada Steamship Lines, as even its vice-president, Mr. Préfontaine, admitted, saying “Yes, perhaps, but we have no intention of applying it”, it turned to the process itself. By February 12, it was starting, through the Prime Minister, to make statements like: “Yes, but all of the rules were respected in tabling the bill. The Minister of Finance did not see its contents, even if he was the one sponsoring it”.
On February 12, the Prime Minister pointed out that, according to what the ethics counsellor had told him, everything was done according to the rules and the Minister of Finance was not at fault. He put his assets and shares into a blind trust and is therefore protected from any apparent or actual conflict of interest.
Unfortunately for the Prime Minister, five days after his statement in the House, his ethics counsellor appeared before the Standing Committee on Finance and was also obliged to admit—not only verbally, but also in his written report—that there was at least a possibility of a problem, because introduction of Bill C-28 had not followed normal procedure. He stated that, normally, had he been approached by the Minister or the Department of Finance on the procedure for tabling, steering or sponsoring this bill, the Minister of Finance would not have acted in this way.
The ethics counsellor recognized that there had been at the very least an apparent conflict of interest. But he later went back on his position and told the finance committee “Look, even if Canada Steamship Lines stood to potentially benefit from these news provisions and the Minister of Finance stood to save substantial amounts in taxes”—we are looking at millions of dollars in the future—“that is not the problem. The problem is that the process should have been more consistent with the rules established in 1994”.
Mr. Wilson, the ethics counsellor, has many problems. The first one is that he changes his tune every time he is questioned on the subject. He writes one thing and says another or vice versa. He has a credibility problem.
Second, his credibility problem is compounded by the fact that he is paid by the Prime Minister, when he should be an independent counsellor reporting to Parliament. In fact, in the red book in 1993 the Liberals stated, and I quote “A Liberal government will appoint an independent ethics counsellor to advise both public officials and lobbyists in the day to day application of the code of conduct for public officials”.
He is not independent, he is accountable to the Prime Minister. This means the Prime Minister can get him to say just about anything, as he is the boss. That is why the government's ethic counsellor has lost all credibility.
The ethics counsellor should be dismissed and replaced with a real counsellor, who would be independent from the government, to shed light on cases like this one without having to wait for an opposition member to put his or her finger on a problem. As it is, the ethics counsellor has become the one who saves ministers' heads.
The motion basically calls for the deletion of section 241, which gives an unfair advantage to shipping companies like the one owned by the Minister of Finance, Canada Steamship Lines, until this matter and the finance minister's apparent conflict of interest have been clarified.
In fact, on February 12, the four opposition parties got together to write a letter to the government, asking that a special committee be struck to shed light on the whole matter. Last week, I personally made a similar request to the Prime Minister, but have not received any reply.
I make the same request again, but in the meantime section 241 should be deleted because we are convinced that there is, at the very least, an apparent conflict of interest around the introduction of the bill containing section 241.